MS Victim Entitled to LTD Despite Treatment

June 25, 2004 (PLANSPONSOR.com) - A federal appeals
court has ruled that a woman afflicted with multiple
sclerosis (MS) was entitled to long-term disability (LTD)
benefits despite a "pre-existing condition" clause even
though she had been treated for MS symptoms.

The U.S. 3
rd
Circuit Court of Appeals ruled that insurers can’t
consider a disease like MS to be an
excludable “pre-existing condition” if a
worker had been treated for resulting symptoms but where
the underlying ailment hadn’t yet been formally
diagnosed, according to a Legal Intelligencer
report.

“It is simply not meaningful to talk about symptoms
in the abstract,” Senior U.S. Circuit Judge Edward Becker
wrote in McLeod v. Hartford Life and Accident Insurance
Co. ruling. “”Seeking medical care for a symptom of a
pre-existing condition can only serve as the basis for
exclusion from receiving benefits in a situation where
there is some intention on the part of the physician or
of the patient to treat or uncover the underlying
condition which is causing the symptom,”

The appeals ruling reverses a decision by U.S.
District Judge Cynthia Rufe, who held that a broadly
worded pre-existing condition exclusion clause in
Hartford’s disability policy barred coverage for
plaintiff Shirley McLeod even in the absence of an MS
diagnosis. Rufe based the ruling on what she said was
proof McLeod received medical treatment for a “symptom”
of the MS sometime in the 90-day period before the policy
went into effect. Rufe found that the exclusion applied
because McLeod was treated for numbness in her arm as
early as February 1999 and was referred to two
neurologists before the policy took effect in April
1999.

The appeals ruling said Rufe’s lower-court decision
was mistaken in saying that Hartford could “read back” a
pre-existing condition for purposes of denying disability
benefits coverage before the condition itself had been
diagnosed. Becker noted that McLeod was not diagnosed
with MS until August 1999.

Rufe erred, he said, in holding that “Neither
[McLeod] nor her physicians either knew or suspected that
the symptoms she was experiencing were in any way
connected with MS,” Becker wrote

“Hartford would have us hold that receiving medical
care ‘for symptoms’ of a pre-existing condition
encompasses receiving care for symptoms that no one even
suspected were connected with the later diagnosed ailment
but which were later deemed not inconsistent with it,”
Becker wrote. “A heightened standard of review will not
countenance such a strained interpretation.”

“In a case of heightened review, where the plan
administrator is not afforded complete, freewheeling
discretion, we must be especially mindful to ensure that
the administrator’s interpretation of policy language
does not unfairly disadvantage the policyholder,” Becker
continued.

Under Hartford’s approach, Becker said, “any
symptom experienced before the excludable condition is
diagnosed could serve as the basis for an exclusion so
long as the symptom was not later deemed inconsistent
with that condition.”As an example, Becker said, a policyholder who
suffered a heart attack could be denied long-term
disability coverage under Hartford’s proposed analysis if
there was proof that the policyholder had been treated
for shortness of breath before the policy took effect –
even if doctors at the time diagnosed the condition as
nothing more than a “very bad cold.”

According to court papers, McLeod worked for Valley
Media Inc., stocking videocassettes in a warehouse, a job
that involved long periods of standing. After she was
diagnosed with MS, McLeod was at first awarded short-term
disability but was later denied a claim for long-term
disability after Hartford learned that she had been
treated by several doctors for the numbness in her arm
during the “look-back period” – the 90-day period that
ended the day before the effective date of
coverage.